Precedents Cited

The judgment references pivotal cases that have shaped the interpretation of consumer protection in real estate:

• Ireo Fiveriver Pvt. Ltd. v. Surinder Kumar Singla (2016): The National Commission held that without concrete evidence of speculative intent, purchasers should be deemed consumers.
• Navin Sharma (Dr.) & Others v. Unitech Reliable Projects Pvt. Ltd. & Anr. (2016): It was established that the cause of action remains continuous until possession is delivered or the amount is refunded.
• Kavita Ahuja & Others v. Shipra Estate Ltd. & Jai Krishna Estate Developers Pvt. Ltd. & Others (2010): Reinforced the principle that absence of evidence indicates the complainant's status as a consumer.
• Raghava Estates Ltd. v. Vishnupuram Colony Welfare Association (2012): Supported the notion that actions like non-delivery or refund requests sustain the cause of action beyond initial deposits.

Legal Reasoning

The Commission methodically addressed the objections raised by the opposite parties:

• Consumer Definition: It was determined that mere assertions without evidence cannot negate the complainant's status as a consumer. The lack of proof regarding speculative intent led to rejecting the defendants' claims.
• Time Bar Objection: The concept of a continuous cause of action was pivotal. Since the complainants had neither received possession nor a refund, their right to seek redress remained active, rendering the complaints timely.
• Deficiency in Service and Unfair Trade Practice: The absence of plot allotment and failure to provide necessary documentation constituted service deficiency. The inability to honor commitments despite receiving substantial deposits was identified as an unfair trade practice.
• Refund Entitlement: The Commission found that the absence of clauses forfeiting the deposit in the expression of interest letter, coupled with the company's inability to provide the plot due to the complainant's alleged non-payment of the balance, warranted the refund of the initial deposit with interest.

Impact

This judgment reinforces the protection of consumers in the real estate sector, especially against developers who fail to adhere to commitments. It underscores the principle that the cause of action persists until the underlying issues of possession or refund are resolved. The decision also emphasizes the necessity for developers to maintain transparency and uphold contractual obligations to avoid being subjected to consumer lawsuits.

Moreover, the case sets a precedent that mere assertions by developers regarding the speculative nature of purchases are insufficient without concrete evidence. This ensures that genuine consumers are not deterred from seeking redress due to unfounded objections.

Continuous Cause of Action

This legal principle means that the right to seek redress remains active until the issue is fully resolved. In this case, since possession of the plot was not delivered and the deposit was neither returned nor utilized as agreed, the complainants continued to hold the right to seek a compromise or refund.

Deficiency in Service

Under the Consumer Protection Act, a service provider is considered deficient if it fails to provide the service as promised. Here, the real estate developer failed to allot plots and deliver possession, thereby not fulfilling their service obligations.

Unfair Trade Practice

An unfair trade practice involves deceptive or unethical actions by a business to gain an advantage over competitors or mislead consumers. The developer's failure to deliver plots despite accepting deposits without valid justification was classified as such.